Edited Transcript of SKF.AX earnings conference call or presentation 24-Oct-19 5:30am GMT

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Q1 2020 Skyfii Ltd salary Call

Oct 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Skyfii Ltd salary assembly shriek or presentation Thursday, October 24, 2019 at 5:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* John Rankin

Skyfii Limited - COO & MD of ANZ

* Wayne Arthur

Skyfii Limited - Co-Founder, CEO, MD & Executive Director

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Presentation

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Operator [1]

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Thank you though standing by, and report ought the Skyfii Limited Quarterly Results Call. (Operator Instructions)

I used to now though ought hand the assembly can ought Mr. Wayne Arthur, head Executive Officer. entertain proceed ahead.

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [2]

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Thank you too much. Good afternoon, everybody, and report ought the first piece econmic year '20 results presentation though Skyfii. My call is Wayne Arthur, Skyfii's CEO, and I'm joined today by our Chairman, Andrew Johnson; our head Operating Officer, John Rankin; and our Investor Relations Adviser, (inaudible).

Quarter 1 econmic year '20 had been our best quarterly originate ought date. We read continued ought drive double-digit growth quarter-on-quarter from our underlying business. We've successfully begun the migration of Beonic's customers and fully integrated the People counting analytics revenues into our affair offering. We've seen well pipeline growth at sum markets, most notably at the U.S. and U.K. regions can the past 3 quarters. And just this final piece read begun ought vary some of these contracts into new enterprise customers above 3- ought 5-year contracts though the Skyfii business.

Following our well Q1 result, this econmic year is found ought exist another too well year though the company at both the peak row and recurring revenue levels, and we are specially excited by some of the near-term opportunities at our pipeline across sum regions, which we desire ought vary this year.

Today's presentation is a slightly shorter format than usual. We read chosen ought unique concentrate above the key affair results, and we'd though ought abandon more of an happen though a Q&A council which, because always, will pursue today's presentation. just because a reminder, today's presentation is too available above the ASX, though those who can desire ought refer ought the slides hind the call.

So moving into glide #2, the company saw no modify at its quoted shares remarkable pool during the quarter. And subsequently, there was no modify ought the main desk or register during Q1 of FY '20. We concluded the piece with cash at bank of $1.09 million, down from $1.33 million at the purpose of Q4 econmic year 2019. And this was primarily owing ought the timing of cash receipts from customers and cash outflows relating ought the Beonic integration.

In addition ought our quoted cash at bank balance, we read secured a borrow facility though working main of up ought $2 million, which we announced at can 2017 -- 2019. And mail piece end, we received $1.04 million from the Australian impose Office beneath the investigation and development impose incentive program though the econmic year ending 30th of June 2019.

Turning ought glide 3. Skyfii operates at and leads a classification called omnidata intelligence. And this classification best defines our affair offering, because it refers ought the drill of collecting, analyzing and actioning information from a multitude of information sets, many of which are existent at physical and digital environments today. We've got a platform and a services offering that helps customers harness affair evaluate from this data. And we post ourselves because a affair which is able of providing our customers with a pathway ought the successful information tactic which delivers tangible affair results.

To fulfill this, we lawyer a mixture of 3 key elements: first, choosing the right data; second, implementing bright and able technique at bid ought amass this data; and third, ensuring that we read the right experienced nation ought assist invent feeling of, and derive insights from, this data. We trust omnidata information is the new phrase though large data, and Skyfii is at the forefront of this classification shift.

Moving ought glide #4, the right data. because our shareholders used to robust know, Skyfii is the unique company within its stare throng which has the technique and the follow record able of ingesting information from more than just WiFi data. This has been a keen point of differentiation though Skyfii. And can the past 3 years, we read successfully diversified our information ecosystem ought enable us ought deliver more right insights and a wider category of products and services offerings. This diversification has, at turn, made us more relevant ought a wider mountain of vertical targets and provided us with the capability ought proceed deeper with our customers into more tangible affair outcomes.

It has too provided us with a defendable post within our markets because we are no singularly reliant above just the 1 information put only. The contemporary acquisition of Beonic is a originate of our omnidata information strategy, which will allow us ought become our attain of physical venues and verticals and add more revenue-generating opportunities ought our existing passenger base.

Most recently, we read begun working more actively with sales transaction data, thereby allowing us ought equip our customers with insights across the sum shopping journey, from the moment their customers stride into the venues and right up until the moment when they transact. There is a lot of information available today and consequently it is keen that enterprises invent the right decisions above which information sets are significant and valuable ought assist solve affair challenges. And it's Skyfii's role ought assist our customers at this first stage ought determination what is the right data.

Moving ought glide 5, stage 2 then is ensuring that customers elect the right technology, a technique that's able of ingesting the information and delivering the insights. Skyfii's IO platform with its omnidata information capacity is such a keen instrument though our customers, most of whom are no technique companies and therefore, fulfill no traditionally possess the in-house capacity ought collect, analyze, visualize and frequently action this data.

As of today, we currently deliver 4 Software because a Service products, our center products of Connect, Insight and hire and our recently launched product, IO Labs. link and Insight are primarily what our customers buy initially. This delivers typically a passenger WiFi service and some foundation analytics above passenger behavior. And from that initial baseline, customers then typically harmony can additional, more feature-rich packages, which now includes People counting analytics. And sum of these are available because an additional upsell. Our marketing tool, Engage, is again a divide subscription service which allows customers ought found and deliver targeted passenger warfare across channels such because e-mail, SMS or video.

IO Labs is a relatively new produce offering, which is primarily sold ought our more established customers who are seeking more customized and tailored reporting, concrete ought their peculiarity needs or affair metrics. And again, IO Labs is a natural upsell revenue opportunity. sum of these produce offerings are sold above a monthly subscription foundation and typically contracted above 3- or 5-year harmony terms. And it's of lecture our intent because a affair ought bear ought deliver new revenue-generating opportunities ought our SaaS modules can time.

Moving ought glide 6, bright people. The last bit of the information tactic jigsaw then is ought join the right information and bright technique with the right people, able of analyzing and matching the information patterns. And this is where Skyfii services team adds additional value. Our services team, which consists of highly experienced information scientists and digital strategists vocation alongside many of our customers ought assist them at delivering tangible outcomes, also across manners investigation projects, assisting ought age the right information tactic or sometimes across information engineering ought assist customers competition their information and their technique stack ought their stated objectives. And these services are typically contracted above also ones-off scheme based or sometimes too recurring revenues, depending primarily above the scope.

Moving ought glide #7, quarterly highlights, besides I'll hand can ought John Rankin ought receive you across the key econmic highlights delivered during the quarter.

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John Rankin, Skyfii Limited - COO & MD of ANZ [3]

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Thanks, Wayne. Moving ought glide 8, I'll equip you with a hasty refresh above how Skyfii generates revenues. The company reports revenues -- 3 revenue lines, being: quantity one, recurring or SaaS revenues, which are generated from ongoing subscription fees though access ought the Skyfii IO platform. Recurring revenues are charged because a fixed price charge per venue per month and typically contracted above 1-, 3- or 5-year terms. Monthly recurring revenues mountain from $50 per venue per month up ought $10,000 per venue per month, depending above the size of the venue and products nominated though subscription. Recurring revenues now include contribution from the Beonic acquisition.

Two, services revenues, which are generated from the payment of projects undertaken by both Skyfii's information consulting services and marketing services divisions.

And three, nonrecurring revenues, which are made up of one-off fees generated from the deployment of hardware and infrastructure which underpins our recurring revenue growth and subscriptions ought the IO platform. These include the tool of WiFi infrastructure, 2D and 3D camera and People counting technology. Nonrecurring revenues includes contribution from the Beonic acquisition.

Moving ought glide 9. Now ago we stride across too pleasing results, it's significant ought restate that Q1 results include contribution from Beonic effective the 9th of July. consequently firstly, full operating revenues. full operating revenues at Q1 of just shy of $3.1 million represented a 26% exaggerate above the previous quarter. Revenues generated from services of $540,000 was down 22%, primarily owing ought a quantity of one-off projects completed at Q4 which did no fetch into Q1.

Looking forward, the sales pipeline though services has significantly increased at Q1 and that team is put ought equip a well contribution though the surplus of the econmic year. And finally, nonrecurring revenues of $460,000 was up 101%, with a well contribution from the Beonic business.

Turning our attention ought the recurring revenue originate at Q1. Recurring revenues of 2 -- just shy of $2.1 million represented a 37% uplift above the previous piece and a 90% improvement when compared ought the too era final year. because I'm certain you'll sum agree, a fantastic originate though the business. besides what is too very pleasing nearly this originate was the underlying recurring revenues though the business, pre-Beonic, which continued ought grow, delivering $1.67 million and representing a 10% improvement above Q4 FY '19.

The underlying affair recurring revenue originate represents the sixth consecutive piece era of quarter-on-quarter growth of 10% or greater; once again, a too pleasing originate though the team and our investor base.

Moving ought glide 10. because announced above the 9th of July, Skyfii completed the acquisition of the assets and elect surplus piece items of Beonic, a consumer insight solution provider specializing at complicated camera and People counting technology. And whilst we had unique been at possession of the affair though a short era of time, we're too pleased with the action of the affair at the purpose of Q1.

It is too very pleasing that recurring revenues delivered by the Beonic affair at the first piece were compatible with the guidance provided above the final quarterly assembly call. The contribution from Beonic passenger contracts delivered a 27% uplift incremental ought the affair underlying recurring revenue growth rates.

I'd too though ought restate the strategic rationale though acquiring the Beonic business. quantity one, the Beonic affair benefits from a portfolio of sad chip customers, and having now met face-to-face with this passenger base, we are too pleased with the certain feedback we shriek on from this exciting new portfolio of customers. And we of lecture appear deliver ought developing a meaningful relationship and farther introducing them ought our extensive produce and service offering.

Two, the acquisition adds significant weight hind our tactic ought diversify information sets and moves us closer ought our purpose of becoming the chief information intelligence platform provider though physical venues globally.

Three, the knowledge transfer across the 2 companies farther extends our competitive advantage.

Four, the synergistic benefits read been clearly evident, specially at supporting our growth expansion of the People counting produce row into our international markets.

And finally, the acquisition commercial condition linger too favorable at 1x multiple of recurring revenues.

Beonic passenger foundation includes many household Australian and international brand names, such because Westfield, David Jones, AMP, QIC, Dexus, New Balance, L'Oreal, Melbourne city assembly and hire Hall ought call a few, sum of whom will amuse from Skyfii's additional and complementary products and services.

So focusing our attention ought the milestones met by the affair at Q1. quantity one, the sales team has already built out a significant sales pipeline with cross-pollination of products and services across the Skyfii and Beonic passenger foundation also because increasing advantage from new passenger prospects, both domestically and abroad.

Two, the migration of Beonic customers across the IO platform has already commenced, with customers too pleased with the rich analytics peculiarity put available at the IO platforms.

And finally, the Beonic team, now Skyfii Melbourne and Skyfii Hong Kong, are now fully integrated into the Skyfii operations according ought plan.

So at summarizing the Q1 results and Beonic integration, firstly, the company has delivered another well quarter-on-quarter growth at full operating revenues and recurring revenues; two, the company had benefited from well contribution from the acquisition of Beonic, with more upside ought exist realized. And finally, looking ahead, Q1 originate has positioned the company ought deliver another well sum result.

Thanks though your time, and I'll now hand you uphold ought Wayne.

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [4]

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Thank you, John. And because I'm certain our shareholders used to agree, a really encouraging put of econmic highlights which demonstrates our capability ought scale this affair across a multitude of geographies, industry verticals and a category of different venue types.

It's specially encouraging ought shriek on how successfully we've managed ought emigrate many of the Beonic customers and the integration of the Beonic affair into our go-to-market, which is resulting at a well integrated revenue offering. And too a new pipeline of opportunities being built at sum markets.

In addition ought the well econmic results delivered at Q1, we've too delivered a sequence of new and remarkable contracts during the piece which underpinned these results.

Firstly, hind a lengthy and competitive hurl process, we successfully closed a task with Wembley stadium at the U.K., a venue which, alongside the SCG, is widely heralded because one of the most famous and highly trafficked sporting stadiums at the world. We successfully concluded a 3-year harmony though provision of our IO link and IO Insight services.

Secondly, we signed a task with our first main resort and casino venue, signing a 3-year harmony though our link service with Baha Mar, which is a large resort and casino complicated located at the Bahamas.

We too signed our first harmony at Puerto Rico at the U.S.A., bringing onboard the first aspect of restaurants across SARCO, which is a cafe consortium, including well-known brands, Krispy Kreme, Baskin-Robbins, and Church's Chicken.

Finally, we successfully renewed and expanded our existing deployment with Autostrade at Italy, which is a chief gasoline convenience operator.

Moving above ought glide 12. because presented previously at the presentation, we read continued ought become and found above our existing enterprise passenger portfolio this quarter, successfully adding the new brands across key verticals of shopping centers, restaurants, airports and stadiums. because just mentioned some of the new brands include Krispy Kreme, Baskin-Robbins at the U.S. piece and our first main resort brand at Baha Mar at the Bahamas. besides most importantly, we read continued ought allege our passenger foundation across the continued delivery of evaluate and value-added services, and we've had no enterprise passenger churn during the quarter.

Moving ought glide 13, and a summary and expectation statement. The company has concluded piece 1 of econmic year 2020, having delivered a 26% uplift quarter-on-quarter from a full operating revenue perspective and a 37% uplift at recurring revenues quarter-on-quarter though the too period. We successfully began ought emigrate key Beonic contracts and integrate the Beonic People counting offering into our business. And are extremely pleased with the first quarter's revenue contribution from the Beonic business.

Importantly, our underlying affair continues ought deliver double-digit growth, and we're extremely excited ought read started the new econmic year with some contracts at the U.S. and U.K. markets. Our modern revenue trajectory and pipeline of opportunities read seen us pacing too robust against our inner targets above both the underlying affair and Beonic business. And we desire ought bear above the modern revenue trajectory though the sum year.

We've seen a significant contribution at both peak row growth and near-term harmony conversion at the U.S. and U.K. markets during the final quarter. And we're anticipating a meaningful revenue contribution from these regions during the surplus of the econmic year.

Specific areas of concentrate though the next piece of econmic year '20 include: conversion of near-term contracts within our international markets, a key concentrate though the business; farther harmony wins and penetration at the retail vertical, specially at the ANZ market. We will bear ought control our cash post and allege a certain EBITDA position.

We will too bear ought expand the Beonic offering into the U.K., U.S.A. and Brazil markets and read already begun ought generate sales opportunities at these markets. And finally, we desire ought farther found out our partnerships with global ecosystem partners, specifically key global managed service providers at the U.S. piece at particular.

As a management team and because a Board, we're thrilled with the quarter's results and too confident at the continued growth of our affair into the next piece and though the sum year. We're highly confident at the investments we read made and bear ought invent within the U.S. and EMEA markets. And based above the existing pipelines at these regions are anticipating well conversion can the coming accommodation ought hind our continued growth globally because we found the world's chief omnidata information business.

With that, I thank you too much though your time today, and used to now though ought hand uphold ought the moderator ought facilitate our Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first issue comes from [Michael Burn] from [Camden Equities].

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Unidentified Analyst, [2]

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I imagine you made some mention nearly some harmony -- no passenger churn during the quarter. I'm interested ought learn nearly the commonplace harmony renewal experience. Could you report across -- I comprehend this is commercially substantial -- sensitive, besides can you report across some of the renewals that you got? I'm certain you've got some early customers with covered contracts now. I'd though ought learn more nearly how they recontract.

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [3]

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Sure. Sure. joyful one. Thanks though the question. consequently look, broadly, our contracts are 3- or 5-year term. consequently you're right, we've had a little cycles of renewals. I assume the pleasing business is we've had no -- none of our early main enterprise customers read truly no renewed basically. consequently one of the strongest, I guess, features of this affair is the passenger retention bit specially those enterprise customers. consequently at this point, no material churn at the enterprise level. We've had a quantity of those early category of customers renew, customers though GPT and consequently on. And at sum cases, because this produce continues ought evolve, we've truly added more products ought that contract. consequently we're no unique renewing those contracts though a 3- or 5-year second term, besides we're truly upselling, and there's additional edge ought exist built across those contracts.

So yes, that's primarily how it works. The method that -- just ought category of pursue above from that, the method that we deliver our products, given it's a alive platform and we're category of adding features each link of weeks ought the product, by the time a passenger moves across its first harmony term, the produce is primarily at a much broader and much more feature-rich supplies by the time they become ought the end. consequently if we're doing our jobs right and we're explain managing those accounts well, then we shriek on a very, too well renewal rate.

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Unidentified Analyst, [4]

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I truly had another question. Well, I imagine during the final call, final time I heard you speak, you mentioned some of your existing passenger base, I imagine -- I don't comprehend if it was the bulk of them or overwhelmingly or the majority of them was above handsome -- above theorem produce packages. fairly a joyful step though upselling opportunity. Does that -- can you simply [back into] the extent that, that happens [in any of the deals you won]?

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Wayne Arthur, Skyfii Limited - Co-Founder, CEO, MD & Executive Director [5]

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Yes, that's right. consequently I guess, again, the -- we nurse ought discover ourselves really at the first warfare with a lot of these customers, starting with the too theorem products. And that's primarily because we are obviously dealing with passenger information at a lot of cases and we're delivering some technology. And consequently we though ought fulfill the most -- the easiest feasible integration ought initiate with. consequently yes, typically, contracts will initiate with the theorem link and Insight packages. I intend because we heap more data, we can introduce some more products, and we primarily fulfill upsell those onto new contracts throughout that initial period. consequently when we become ought the renewal, it's -- those customers are 2 or 3 stages farther than someone who's signing up with us though the first time. Did I reply your question, Mike?

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Unidentified Analyst, [6]

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It did. Thank you too much.

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Operator [7]

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(Operator Instructions) Your next issue comes from [Stella Wong], who is a personal investor.

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Unidentified Participant, [8]

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